EU and US could reach trade deal this weekend - Reuters
FedEx Corporation (NYSE:FDX) shares tumbled nearly 6% Wednesday following the shipping giant’s decision to suspend its full-year forecast despite beating fourth-quarter earnings expectations.
The Memphis-based logistics company reported quarterly EPS of $6.07, surpassing analyst estimates by $0.11, and revenue of $22.2 billion that topped consensus forecasts of $21.84 billion.
However, investor sentiment soured as FedEx declined to provide fiscal 2026 guidance and offered a disappointing first-quarter outlook, with projected adjusted earnings of $3.40 to $4.00 falling short of analyst expectations.
FedEx’s Earnings Beat Overshadowed by Outlook Concerns
FedEx delivered a solid fourth-quarter performance with adjusted earnings per share of $6.07, beating the consensus estimate of $5.96 by 4.59%. Revenue for the quarter reached $22.2 billion, representing less than 1% year-over-year growth but exceeding analyst projections of $21.84 billion. The company’s adjusted net income rose to $1.46 billion from $1.34 billion in the prior-year quarter, demonstrating operational resilience despite challenging market conditions.
However, the earnings beat was quickly overshadowed by management’s cautious stance on future performance. FedEx’s first-quarter fiscal 2026 adjusted earnings guidance of $3.40 to $4.00 per share fell below the Visible Alpha consensus, signaling potential headwinds ahead.
The company projected flat to 2% revenue growth year-over-year for the first quarter, which while better than Street expectations, still reflects modest growth prospects in the current operating environment.
The decision to withhold full-year guidance represents a significant departure from standard practice and suggests management faces considerable uncertainty about business conditions. This marks the fourth consecutive quarter that FedEx has provided disappointing forward-looking commentary, having slashed its fiscal 2025 outlook three quarters in a row before ultimately suspending annual forecasts entirely.
Why are FedEx Shares Plunging Today?
FedEx shares closed Tuesday at $229.52 before plunging to $218.50 in premarket trading Wednesday, representing a 4.71% decline from the previous close. The stock has faced significant pressure throughout 2025, falling nearly 20% year-to-date and declining 10.48% over the past 12 months. The company’s market capitalization stands at $54.99 billion, with shares trading within a 52-week range of $194.30 to $313.84.
Recent analyst sentiment has turned increasingly bearish, with FedEx experiencing 20 negative EPS revisions compared to just one positive revision over the past 90 days. The stock’s underperformance is stark when compared to broader market indices, with FedEx posting a year-to-date return of -17.44% versus the S&P 500’s positive 3.58% gain. Over longer time horizons, the performance gap widens further, with FedEx’s one-year return of -8.56% trailing the S&P 500’s 11.83% advance.
The decline comes amid broader concerns about trade policy impacts on shipping demand, particularly following recent tariff announcements that could dampen discretionary spending and reduce package volumes. With a trailing P/E ratio of 14.44 and forward P/E of 11.43, the stock appears attractively valued on traditional metrics, but investors remain focused on the company’s ability to navigate uncertain macroeconomic conditions and provide clearer visibility into future performance.
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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.
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